valid as on 05/12/2024

Section 2(76). Related party
Effective from 12-09-2013 and font in blue from 09.02.2018

Regulation2(1)(zb)of LODR

(76) “related party”, with reference to a company, means—

(i) a director or his relative;

(ii) a key managerial personnel or his relative;

(iii) a firm, in which a director, manager or his relative is a partner;

(iv) a private company in which a director or manager  is a member or director;

(v) a public company in which a director or manager is a director or  holds along with his relatives, more than two per cent of its paid-up share capital;

(vi) any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager;

(vii) any person on whose advice, directions or instructions a director or manager is accustomed to act:

Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;

any body corporate which is—

(A) a holding, subsidiary or an  of such company;

(B) a subsidiary of a holding company to which it is also a subsidiary;or

(C) an investing company or the venturer of a company;

Explanation.—For the purpose of this clause, “the investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an of the body corporate.

(viii) any company which is—

(A) a holding, subsidiary or an associate company of such company; or

(B) a subsidiary of a holding company to which it is also a subsidiary;

(ix) such other person

inserted by the Companies (Removal of Difficulties) Sixth Order, 2014 vide order no. S.O.1894 (E) dated 24th July 2014.To view the order,Click Here
substituted by the Companies (Removal of Difficulties) Fifth Order, 2014 vide order no. S.O.1820 (E) dated 9th July 2014.To view the order,Click Here
  1. Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018. To view the notification,Click Here
  2. This clause do not apply to private company with respect to section 188, vide notification no. G.S.R. 464 (E) dated 5th June 2015.(The exceptions, modifications and adaptations provided above shall be applicable only to those Private Companies which has not committed a default in filing its financial statements under section 137 of the said act or annual return under section 92 of the said act with the registrar, vide notification dated 13th June 2017)To view the notification,Click Here3. This clause shall not apply with respect to section 188 vide exemption notification to specified IFSC Public Companies, GSR 08 (E),Click Here
2(6) Associate Company, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
Explanation.—For the purpose of this clause—
(a) the expression “significant influence” means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;
(b) the expression “joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement;
2(6) Associate Company, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
Explanation.—For the purpose of this clause—
(a) the expression “significant influence” means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;
(b) the expression “joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement;
Refer rule 3 of Companies (Specification of definitions details) Rules, 2014. To view the rule,Click  Here

1.1.3- Companies (Specification of definitions details) Rules, 2014.

3. Related party.-
For the purposes of sub-clause (ix) of clause (76) of section 2 of the Act, a director   or key managerial personnel of the holding company or his relative with reference to a company, shall be deemed to be a related party.

inserted by Notification no. G.S.R. 507 (E). dated 17 July 2014. To view the notification,Click Here

GSR 507 E


Companies (Removal of Difficulties) Fifth Order, 2014 [S.O. 1820 (E)] dated 09/07/2014


Companies (Removal of Difficulties) Sixth Order, 2014 [S.O. 1894 (E) dated 24/07/2014


Commencement Notification dated 09.02.2018


Enforcement notification S.O.2754 (E) dated 12/09/2013


Exemption to Specified IFSC Public company [GSR 08(E)] dated 04/01/2017


Exemptions to Private Companies [Amendment to GSR 464(E)] dated 13/06/2017


Exemptions to private companies [GSR 464 (E)] dated 05/06/2015


The Companies (Amendment) Act, 2017 (Effective from 03.01.2018)


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